By the way, the carryback period is two years, unless it's from theft or casualty..To recap, iIf you have other income
, your business loss first applies to reducing this income in the current tax year. If you had $20,000 in W-2
income from an employer, $2,000 in passive interest
income, and $18,000 in business losses, you would pay tax on only $4,000 of income, or $22,000 minus $18,000..But THEN, to your question, if your loss is MORE than the income you can either carry back 2 years or waive the carry-back and carry only forward..Finally, to waive the carryback, attach a statement to your original return filed by the due date
) for the NOL year. This statement must show that you are choosing to waive the carryback period under section 172(b)(3) of the Internal Revenue Code
..If you filed your return timely but did not file the statement with it, you must file the statement with an amended return
for the NOL year within 6 months of the due date of your original return (excluding extensions). Enter “Filed pursuant to section(###) ###-####2” at the top of the statement..Hope this helps.Lane.Is this has helped, I'd appreciate a positive rating using the stars at the top of your screen. That's the only way I'll be credited for the work here.